Hospital Settlement: ‘Where Has Our Money Gone?’

Monday, 10 February 2025, 9:13 pm
Article: Emily Ireland - Local Democracy Reporter

Wairarapa-based MP Kieran McAnulty has renewed a call for the whereabouts of potentially millions of dollars from a court settlement over Wairarapa’s defective hospital.

In answering the call, Health Minister Simeon Brown said taxpayers had “already invested in remediating the buildings” at the heart of the legal battle.

But McAnulty said that still didn't answer the main question: "Where has our money gone?"

The former Wairarapa District Health Board sued Masterton District Council for $90 million in damages, plus interest and costs, to remedy the defective hospital.

The claim related to alleged defects in the construction and consenting process for Wairarapa Hospital between 2004 and 2007 and questions about a code of compliance certificate.

During High Court proceedings in 2023, the council denied liability and defended the claim on a range of grounds.

It said the hospital could be remedied for $4m, whereas Health NZ argued a new hospital needed to be built.

Last year, it was revealed that the council and Health New Zealand settled out of court.

Requests for the settlement details by Local Democracy Reporting under the Official Information Act were denied “in order to maintain legal professional privilege”.

This included a request for the percentage of the settlement money that was ringfenced for Wairarapa.

McAnulty said “every cent of it” should have been ringfenced to improve Wairarapa Hospital.

“That money should be spent on our hospital and we want to know where it has gone,” McAnulty said in a recent Facebook post that has been shared 190 times.

McAnulty said the hospital was still “below standard -- and we deserve, just like everyone else, a hospital that fits the bill”.

In a statement, Health Minister Simeon Brown said the hospital had been strengthened so that it was no longer earthquake prone.

“The Wairarapa Hospital is a critical asset for the Wairarapa community, and ensuring it is safe is a priority,” Brown said.

“That’s why taxpayers funded seismic strengthening of the hospital prior to the settlement between Masterton District Council and Health New Zealand.

“The seismic strengthening included fixing peripheral structures such as walkways, the cafeteria, and the ambulance bay.”

Earthquake strengthening work completed at the Hospital in 2019 and 2020 had cost about $330,000 and been necessary to get the building up to at least 34 per cent of the NBS [new building standard].

This work was needed because there were serious safety risks if they were not done.

The remedial work on this occasion had been to the hospital entrance canopy, ambulance bay, glazed walkways, and cafeteria, and was separate from the additional work needed to deal with the systemic seismic defects throughout the Hospital structure.

A complaint made to the Ombudsman in September last year about Health NZ's Official Information Act refusal is yet to be assigned.

Although the council’s insurer paid the settlement, it subsequently drove up insurance premiums for the council which was passed onto ratepayers.

Brown said he was working with officials to develop a national long-term health infrastructure pipeline which would “support further investment in the Wairarapa region to ensure it has the critical health infrastructure the region needs”.

– LDR is local body journalism co-funded by RNZ and NZ On Air

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